Globalization and the Patterns of Industry location: The Case of

the Aerospace Industry

Jorge Niosi & Majlinda ZheguUQAM

May 2005

Introduction• The metaphor of blind men and the

elephant

Time for an holistic perspective

Plan of the presantation

• Theoretical perspectives

• Regionalisation and globalization: the case of aircraft

• Co-evolution of industry, regions and public policies

• Concluding remarks

Theoretical perspectives• Regionalization theories:

– The New Economic Geography– The Learning Economies and Knowledge

Spillovers Theories – The System of Innovation perspectives

• Internationalization theories:– Causes– Globalization taxonomies– Role of multinational firms

• The interaction between the two systems

Interaction between local and global systems: The case of aircraft industry• The characteristics of the industry

• The patterns of industry location – The early years

– The growth period

– The maturity period

• Local and global dynamics

Location patterns: the early years

…the early years (continue)

…the early years (continue)

…the early years (continue)

The growth periodConcentration of Fleets by Manufacturers of Aircraft, 1932-1965

Year Douglas Boeing LockheedConsolidated Martin Stinson Fokker

Curtiss- Wright Ford Foreign

1932 0 19 8 0,8 0 15,5 15 7 16,8 01933 0,3 29,7 11,6 2,1 0 11,9 8,9 10,1 13,1 01934 6,3 29,6 12,9 2,1 0 14,4 1,8 9,9 14,1 01935 17,7 28,6 18,1 1,9 0 15 0,3 6,8 8,1 01936 32,7 24,1 20,2 1,9 0 10 0 3,1 3,1 01937 53,6 20,4 21,7 0 0 4,3 0 0 0 01938 61,9 16,9 19,5 0 0 1,7 0 0 0 01939 69,3 14,9 14,9 0 0 0,8 0 0 0 01940 77,8 10,4 11,2 0 0 0,6 0 0 0 01941 81,9 9,6 8,5 0 0 0 0 0 0 01942 93,9 0 6,1 0 0 0 0 0 0 01943 91,1 0,5 7,3 0 0 0 0 0 0 01944 93,4 0,4 5,9 0 0 0 0 0 0 01945 94,2 1,3 4,5 0 0 0 0 0 0 01946 95,4 0,8 3,8 0 0 0 0 0 0 01947 92,3 0,7 5,8 0 1,2 0 0 0 0 01948 80,8 0,7 6,3 9,1 3,1 0 0 0 0 01949 74,1 1,9 8,4 12,4 3,1 0 0 0 0 01950 68,7 1,9 12,2 13 4,2 0 0 0 0 01951 68,3 1,9 13,6 12,4 3,7 0 0 0 0 01952 58,1 1,8 14,9 13,5 11,8 0 0 0 0 01953 50,8 1,7 15,6 20,1 11,8 0 0 0 0 01954 49,8 1,1 15,9 21,6 11,6 0 0 0 0 01955 49 1 17,8 20,5 10,9 0 0 0 0 0,81956 46,5 0,8 17,4 20,5 9,8 0 0 0 0 4,91957 46,7 0,7 18,4 20,5 8,8 0 0 0 0 4,91958 48 0,7 18,4 18 8,4 0 0 0 0 6,41959 43,8 4,5 24,5 14,6,8 0 0 0 0 0 6,51960 44,5 6,9 23,1 13,7 5,9 0 0 0 0 61961 41,2 11,8 23,2 13,6 3 0 0 0 0 7,21962 39,4 15,6 21,8 14,1 1,4 0 0 0 0 7,71963 38,1 18 22,6 14,2 0 0 0 0 0 7,21964 33,2 27,1 20,5 12,5 12,2 0 0 0 0 6,91965 26,8 36,2 17,6 11,7 0 0 0 0 0 7,7

Source: Almarin Phillips, 'Technology and Market Structure. A study of the Aircraft Industry', 1971

…continue

Total US Aircraft industry employment in 2002

…continue

Airlines performances after market deregulations

Maturity and (or) the decline period

Figure 7: Aircraft industry employment during the period 1955-2004 Based on data from the US Bureau of Census

0

200000

400000

600000

800000

1000000

1200000

1400000

US aircraft totalemployment

…continue

The Supply chain restructuring

Figure 9 How industry, regional system and public policy co-evolve? The life cycle of the industry

Take off Growth Maturity (further growth or decline) Incubator Regions: limit to success situation

National Champion Hosting Regions: Growth and underinvestment situation

International megacentres : Escalation situation

Publ

ic p

olic

ies

Reg

iona

l

Nat

iona

l

Inte

rnat

iona

l

Archetypes of regions

• The incubator Region

• The National Champion Hosting Region

• The International Mega-Centers

Mechanisms driving the co-evolution

• Atomistic

• Public policies interventions

• Global pipelines

System dynamics

• Limit to success situation

• Growth and undeinvestment situation

• Escalation situation

National Champions Hosting Regions and International Mega-Regions

Fig. 9 Distribution of patents for the class 244for the period 1973-2003

Basedon the USPTO Database

Fig. 9 Distribution of patents for the class 244for the period 1973-2003

Basedon the USPTO Database

Concluding remarks

• Holistic view of the co-evolution of industries, regions and public policies

• Formulation of adequate strategies in specific moments and spaces

• Evolution and diversity• Future developments:

– building blocs (industries, regions, systems of innovation)

– mechanisms (public policies, local or global networks, etc)